Abstract
Despite the risk associated with nuclear energy, it represents an attractive climate change mitigation option and energy supply security. We examined how South African households perceive nuclear energy in the context of climate change mitigation, risk and avoidance of power outages. The objective of this study is to investigate households’ willingness to pay (WTP) for the proposed second nuclear power. Traditional analysis of such data has tended to ignore zero WTP values. A spike model (i.e., “two-part model”) which explicitly accounts for zero WTP is employed. We also test for effect of distance on WTP. The Thyspunt dummy is negative and significant in the probit model, which implies that those who are closer to the plant are more likely to state a zero WTP. The second decision, WTP given positive WTP, modelled with a truncated regression model suggests that putting more distance between residences and the nuclear plant would have little effect on WTP. Therefore, distance is not a relevant predictor of WTP for solving the problem of nuclear-related risk. Higher dependence on electricity is most likely to lead people to be more supportive of the planned plant.